WASHINGTON, March 15--The Environmental Protection
Agency's relationship with the nation's largest disposer of toxic wastes
is becoming a matter of contention within the Government.

Two agency officials who have long been critics of
the agency's efforts to clean up toxic wastes said in interviews that the
agency was showing a pattern of favoritism toward the company, Waste Management
Inc., whose leadership and legal. counsel now include former officials
of the E.P.A., the Justice Department and the White House.

But the agency says that, far from showing favoritism,
it is concentrating some of its strongest enforcement weapons against Waste
Management because it is the giant of the waste disposal industry. Agency
officials said they were now looking at all of the company's facilities,
not only to bring them into compliance with the toxic waste laws but also
to compel the company to permanently adopt sound environmental and public
health policies.

The company also said it was being singled out unfairly
for enforcement action and had been subjected to excessive penalties. Waste
Management officers further maintained that the company's environmental
record was better than those of almost all other companies in the business.
"We have been subjected to the most intense inspection
and enforcement of any company in the history of E.P.A." said Walter C.
Barber, the company's vice president for environmental management, who
is a former Acting Administrator of the Federal environmental agency.
But Hugh B. Kaufman and William Sanjour, two middle
level officials in the agency's toxic waste program, said E.P.A. actions
had helped the company make millions of dollars rather than remove the
competitive advantage they said it had gained through repeated violations
of law.
Mr. Kaufman and Mr. Sanjour cited three agency actions
involving Waste Management that they said were examples of special treatment.
One was a permit for the burning of toxic polychlorinated
biphenyls, or PCBs, aboard the company's incinerator ship Vulcanus. The
final permit, contrary to agency policy, included a phrase that allowed
the ship to burn wastes containing dioxins from Love Canal in Niagara Falls,
N.Y. A later report by the agency's inspector general found that no one
in the agency would admit to inserting the phrase; to this day, agency
officials say they do not know how it came to he included.
A second action was the recent complaint issued
by the agency seeking penalties. for violations at a company waste disposal
site in Vickery, Ohio. Mr. Sanjour and Mr. Kaufman said their analysis
showed the penalty did not come close to matching the money made by Waste
Management as a result of the violations.
The third action was the recent settlement of agency
charges of violations at the company's giant disposal site at Emelle, Ala.
The two E.P.A. critics said the settlement benefitted Waste Management
because it waived rules restricting the company's freedom in disposing
of toxic wastes.

The Vulcanus Permit

According to the report by the agency's inspector
general, "program officials responsible for issuing this permit were unable
to provide an explanation or documentation as to why the change was made
to include the phrase 'other organic components,' who made the change or
when It was made."
The inclusion of that phrase, the report said, "allowed
the legal, although according to" Chemical Waste Management, a subsidiary
of Waste Management, "inadvertent, incineration of highly toxic dioxin-contaminated
wastes, which was not intended by E.P.A. to be incinerated."
Mr. Kaufman also said that without the alteration
in the permit language, the company, at least technically, would have been
liable to criminal action for not reporting to the E.P.A. that it had taken
dioxin-contaminated waste from the Hooker Chemical Company's facility in
Niagara Falls.
Mr. Kaufman and Mr. Sanjour said the agency should
have followed up on the inspector general's report by calling for a criminal
Investigation.
Steven A. McNamara, who signed the report for the
inspector general, said no justification had been found to seek criminal
charges because of the permit change because it had not been determined
who had altered the permit.
Mr. Kaufman noted, however, that the State of Alabama,
where the wastes bound for the Vulcanus were stored, had found the circumstances
surrounding the change of language sufficiently questionable to undertake
its own criminal investigation, which is still going on.
Harold Gershowitz, senior vice president of Waste
Management, said, "No one in the company knows the genesis of the change
in the permit language."And Mr. Barber said: "The change seemed perfectly
appropriate on the face of it. There was no intention of having it changed
to burn dioxin."

The Vickery Complaint

On Jan.24, the Chicago regional office of the E.P.A.
filed a civil complaint against Chemical Waste Management for what it charged
were improper handling and disposal of waste oils contaminated with PCBs
at its disposal site in Vickery. Ohio. The complaint said the company had
sold six million gallons of the contaminated oil for fuel and for road
oiling and that the oil had been improperly stored at the site.
In the complaint, the agency said that "there was
a high probability of harm to human health and the environment" when PCBs
were improperly disposed of, diluted and distributed from the Vickery facility.
The agency called for a penalty of $6.8 million
for the violations at Vickery and noted that it was the largest fine sought
so far under the Toxic Substances Control Act. Among other things, the
agency said, the penalty was intended to reduce or eliminate the competitive
advantage gained by Waste Management as a result of failing to obey the
law.
But the complaint itself noted that the company
saved "at least" $20 million by selling the PCB-contaminated oil.
Mr. Kaufman and Mr. Sanjour said the penalty did
not take into account money made from the illegal activities. And, saying
that no criminal charges had been filed against any officer of Waste Management,
they noted that in another case in which a company had been charged with
illegally disposing of PCB-contaminated oils, the owner was sent to jail
for nearly a year. That involved the spreading of contaminated oils on
roads in North Carolina by the Ward Transformer Company, whose owner was
Robert E. (Buck) Ward.
Michael Walker, the E.P.A. lawyer in charge of the
Vickery case for the Chicago regional office, said the agency had considered
a number of factors in deciding how to penalize the company.
One, he said, was that Waste Management had agreed
to pay the State of Ohio a $10 million fine for the Vickery violations.
Another was the company's agreement to improve the conditions at the Vickery
site to bring it into compliance with toxic waste laws. The cost of these
improvements was expected to range as high as $15 million, he said.
Mr. Walker agreed that the penalty had not taken
into consideration the profits made by the company by selling the contaminated
oil. He also agreed that compliance with toxic waste laws would be required
in any case and that the cost "should not be part of the penalty."
But he said it was believed that the $6.8 million
"was as much as we could realistically ask for" because administrative
law judges to whom the complaints had been taken were not used to being
asked for multimillion dollar civil penalties.
As for criminal penalties, Mr. Mays of the E.P.A.
office here said it was a matter of record that the United States Attorney's
office in Chicago had confirmed that an investigation of possible criminal
charges involving the Vickery site had been initiated by Justice Department
officials in Ohio. That inquiry is still going on.
Mr. Barber said that the Vickery operations had
had no adverse impact on human health or the environment and that the penalty
sought by E.P.A.; "is way out of line."
James D. Range, Waste Management's senior manager
far Government affairs, said negotiations were under way with the Federal
Government in an attempt to settle the case against the company, and that
the issue of criminal charges was one of many being discussed. He said
he hoped the negotiations would be concluded in a few weeks.

The Emelle Settlement

On Dec.19, the E.P.A. signed an agreement with Chemical
Waste Management under which the company must pay penalties totaling $600,000
for illegal storage of PCBs and other violations of the toxic waste laws
at its huge landfill in Emelle, Ala. Under the agreement, the company also
undertook a number of technical and administrative actions to correct deficiencies
at the site. The agency estimated the cost of these actions at $1.5 million.
In return, the agreement restored the company's
permit to dispose of PCBs. It also waived, without explanation, a requirement
that the bottoms of landfills storing toxic wastes be at least 50 feet
from "the historical high water table." And the agency agreed not to sue
the company for any civil violations at the site based on facts known to
the agency and its employees prior to Oct. 12,1978.
Mr. Kaufman and Mr. Sanjour contend that the settlement
was a windfall for the company, rather than a penalty for evasion of the
law. They said the waiver of the 50-foot requirement alone would save millions
of dollars for the company in me future.

Possible Leak Is Disputed

They also said the agency had information that the
Emelle site might be leaking, which would be reason not to grant the waiver.
A memorandum by Mr. Sanjour to a deputy state attorney
in Alabama said that because of the information that the site might be
leaking, the E.P.A., under its own rules, should have prohibited the site
from taking in wastes from other dumps that were being cleaned up under
Federal laws. Mr. Sanjour said that two indicators from monitoring wells
at the site suggested the site was leaking and that, under agency procedures,
a site was presumed to be leaking when there were two such indications.
Mr. Range said that while indicators did show that
"molecules" of chemical pollutants were getting into water beneath the
site, it was incorrect to describe the site as "leaking" because the water
would not migrate away from the site for at least 10.000 years. The possibility
of leakage is being studied by the State of Alabama as part of its inquiry.

Company Cites a Loss

The agency also found in its initial complaint against
the company at Emelle that the company stored PCB wastes for longer than
the one year permitted by law.
But Waste Management officers said, and E.P.A. officials
concurred, that the Emelle site continued to take the PCBs because the
company had been led by the agency to believe it would soon be given a
long-term permit to burn the wastes aboard the Vulcanus.
Waivers of the rule prohibiting a landfill within
50 feet of underground water are routine, said Terrell Hunt, an agency
enforcement official. Half of the applications for such waivers are granted,
he reported. In the case of Emelle, the water near the waste site was a
"saturated zone," not an aquifer, so the wastes did not threaten drinking
water, he said.
Mr. Gershowitz of Waste Management said that, far
from making money by storing the PCB wastes at Emelle, the company had
lost money because it had been envisioned that the wastes stored at the
site would be "turned over" several times a year as they were taken to
the Vulcanus and incinerated.

Here we are sitting with the same consignment for
two and a half years," he said. "The assertion that this has been a money-making
proposition for us is outrageous."

Mr. Kaufman, Mr, Sanjour and some other critics say
Waste Management, because of its political and legal influence, is able
to obtain what Mr. Kaufman called "sweetheart deals" from the agency that
enable it to flout toxic waste laws at relatively little cost.
Competitors of Waste Management also said the company
had been getting preferential treatment.
Richard Fortuna, executive director the Hazardous
Waste Treatment Council, which represents 35 companies engaged in the management
of toxic wastes, said, "There is a shared concern in the commercial treatment
industry that E.P.A. sanctions against Chemical Waste Management are grossly
inadequate and frequently amount to little more than a business surcharge.
rather than an effective deterrent to noncompliance."
But agency spokesmen and the company disagree.
Richard H. Mays, senior enforcement officer for
the E.P.A., said it was "irresponsible and totally untrue for Mr. Kaufman
and others to say we have any kind of cozy relationship with Waste Management
-- to the contrary." He said the agency was looking at Waste Management
facilities all over the country with the intent not only of correcting
violations and seeking penalties "but addressing corporate policies, or
lack of them, that are the cause of the violations."
"Waste Management thinks we are picking on them,
but it is not true," Mr. Mays said. "We are expanding our corporate policy
to other companies. We are just starting with Waste Management."
In a settlement such as the one reached a t Emelle,
Mr. Mays said, the agency has obtained more than it could have by simply
punishing companies by forcing them to adopt policies that would protect
the environment over the long run.

We Are Not satisfied

Terrell Hunt of the E.P.A. said the company was "required
to obey the law and the fact is they are doing it poorly now." He added,
"We are not satisfied and we are trying to get them to do better.
One high-ranking agency official who has been involved
with the regulation of Waste Management and who asked not to be identified
spoke for many at the agency in saying: "Historically, Chemwaste was regarded
as one of the few generally responsible companies in hazardous waste, and
it is fair to say that to some extent we wanted to encourage them. In the
past we didn't scrutinize them the way we should."
Mr. Barber, the company's vice president said: "The
company's compliance today with the law is clearly among the best in the
country with regard to the disposal of hazardous wastes. We see what the
rest of the industry is doing. We have been subjected to the most intense
inspection and enforcement of any company in the history of the E.P.A."
While there are still "areas of concern," Mr. Barber
said, the company is investing many millions of dollars in improved facilities
to comply with the law.